Bank of England hikes interest rates by 25 bps to 4.25%

The Bank of England (BOE) on Thursday, March 23, raised its interest rates by 0.25 percentage points, from 4 percent to 4.25 percent, in an effort to combat rising inflation. Despite the recent upheaval in the banking sector, the central bank proceeded with the expected increase, setting its benchmark lending rate at its highest level since 2008.

The move comes as the UK economy avoids recession for now and the BOE predicts that inflation remains a significant risk. It is the 11th straight increase for the central bank and follows similar hikes at the US Federal Reserve and European Central Bank.

The BOE's decision, supported by a 7-2 majority of policy makers, keeps the possibility of further rate hikes open if inflation continues to pose a threat. Notably, none of the BOE staff members dissented from the decision.